AeonCr- did not disappoint

Results Update

AeonCr announced its results for QE30/5/2011 yesterday. Its net profit dropped marginally by 1% q-o-q to RM19.2 million while turnover increased by 4.6% to RM77 million. The decline in net profit was attributable to higher operating expenses, in particular promotional expenses, personnel expenses & administrative expenses. Compared to the same quarter last year, net profit increased by 45.3% while turnover gained 22.5%.


Table 1: AEONCr's last 8 quarterly results



Chart 1: AEONCr's last 16 quarterly results

Valuation

AeonCr (closed at RM4.90 yesterday) is now trading at a PE of 8.4 times (based on last 4 quarters' EPS of 57.85 sen). At this multiple, AeonCr is deemed attractive. It could trade up to a PE multiple of 10 times.

Technical Outlook

AeonCr has broken above the line connecting its recent high (but ignoring the high recorded in the first 2 weeks of trading after its listing on Bursa Malaysia. If we assume that this current breakout can travel the same distance as that achieved from its recent low to the breakout point, then the potential target price would be about RM5.40.


Chart 2: AEONCr's weekly chart as at June 10, 2011 (Source: Tradesignum)

Conclusion

Based on good financial performance, attractive valuation & bullish technical outlook, AEONCr could be a good stock for medium-term investment.